Question

1.1.The overhead absorption for product P is N$4 per machine hour. Each unit of P requires 3 machine hours. Inventories of product Plast period were: Units Opening inventory 2 400 Closing inventory 2 700 Compared with marginal costing profit for the period, the absorption costing profit for product P will be which of the following? Select one: O a. N$3 600 lower O b. N$3 600 higher O c. N$1 200 higher O d. N$1 200 lower O e. None of all 1.2. Last month a manufacturing company's profit was N$2 000, calculated using absorption costing principles. If marginal costing principles has been used, a loss of N$3 000 would have occurred. The company's fixed production cost is N$2 per unit. Sales last month were 10 000 unit. What was last month's production (in units)? Select one: O a. 10 500 O b. 7500 O c. 9 500 O d. None of all O e. 12 500 1.3. Bush Wood Farm produce a certain type of natural herb immune booster which is sold at N$30 per unit: N$ per unit Direct materials 6.00 Direct labour 7.50 Variable overheads 2.50 Fixed overhead absorption rate 5.00 21.00 Budgeted production for the month was 5 000 units although the company managed to produce 5 800 units, selling 5 200 of them and incurring fixed overhead costs of N$27 400 What is the absorption costing profit or loss for the month? Select one: O a. N$45 400 O b. N$45 200 O c. N$46 800 0 d. N$48 400 O e. None of all 1.4. Last month when a company had an opening inventory of 16 500 units and a closing inventory of 18 000 units, the profit using absorption costing was N$40 000. The fixed production overhead rate was N$10 per unit. What would the profit for last month have been using marginal costing? Select one: O a N$65 000 O b. None of all 0 c. N$25 000 0 d. N$15 000 O e. N$55 000

Answer 1